Good Luck Finding A Charging Station For Your EV; Tesla Has That Nearly On Lock

Tesla may be one of the most put upon companies in the automaker world, but its prolific charging stations are showing it is indeed a formidable force.

It’s all about its supercharger stations, whose numbers are tearing higher each year. Their proliferation gained the attention of Morgan Stanley analyst Adam Jonas who penned a note to investors Tuesday calling the stations a possible “competitive moat” compared to other electric vehicle makers.

Tesla Charging Stations Pique Analyst’s Interests

Below is a map that shows how much of a chokehold Tesla has when it comes to charging outlets.

By the end of 2018, Tesla was closing in on having nearly 13,000 charging stations worldwide. Called Superchargers, these stations are a weapon for Tesla in the increasingly competitive electric vehicle space.

In the note, obtained by CNBC, Jonas wrote:

“Part of the strategic attraction to Tesla is its physical infrastructure footprint, which we believe, over time, can improve the customer experience, reduce friction points, and support the fleet management of many millions of Tesla vehicles on the road and in both captive and 3rd party commercial fleets.”

Supercharging Just Revving Up

In addition to its Supercharger stations, Tesla has a network of so-called destination charging partners. These partners include hotels, restaurants, shopping centers and resorts that have charging outlets available people arrive at their destinations.

Coupled with the 13,000 supercharging stations, the destination charging places give Tesla owners nearly 35,000 places to rev up their engines. If you think that’s enough, think again. Tesla’s is planning to add more.

Jonas said:

“We estimate Tesla’s chargers may account for 30 percent to 40 percent of total US charging outlets counted by the US Dept. of Energy.”

Tesla states:

Tesla is installing Superchargers in urban areas where city dwellers and out of town visitors can easily charge. These stations are placed at convenient locations like grocery stores, downtown districts, and shopping centers so charging fits seamlessly into your life.

It takes about an hour to charge up at supercharging stations. It takes longer at the destination outlets.

Jonas said:

“Part of the strategic attraction to Tesla is its physical infrastructure footprint, which we believe, over time, can improve the customer experience, reduce friction points, and support the fleet management of many millions of Tesla vehicles on the road and in both captive and 3rd party commercial fleets.”

But There’s Still A Problem

Tesla’s woes include being unable to roll out its vehicles as fast as many desire. These issues persist despite the company ramping up the production of its flagship Model 3. It’s even shaved $1,100 off the price tag, CCN.com reported.

While that’s good, Jonas found a problem. He said the growth in Tesla’s charging network “is far slower than the growth in Tesla’s car population.”

Even though the EV maker’s charging network exploded by roughly 40% year-over-year, Jonas pointed out that the number of Teslas on the road increased by 83%. Aggravating the situation, according to Jonas, is, the pace of growth, which is:

“far faster than its physical store and service location network, raising investor concerns about the strain on the system. While Tesla has made efforts to address issues with service quality (such as increasing its Mobile Service fleet to 411 vehicles), the customer service experience appears to have significant room to improve.”

As Tesla builds out its networks, reports are finding that most EV drivers do their charging at home. The U.S. Department of Energy states more than 80% of drivers charge at home it’s cheaper.

Refusing To Be Outdone In Charging Space

Launched less than two years ago, Tesla’s Model 3 is already proving to be a major thorn 81-year old automotive giant Toyota, CCN.com recently reported. According to Electrek, Tesla is responsible for about 50% of the defection rate that Toyota is experiencing in North America. Among the top five cars that buyers of the Model 3 were trading in last year, Toyota Prius was leading.

CEO Elon Musk is even in talks with German automaker Daimler to collaborate on an electric van inspired by the Mercedes-Benz Sprinter.

Tesla’s competition isn’t just rolling over and letting the sensation ride off with the lead in the EV space. They are taking steps to increase their charging infrastructures numbers, too.

The feather in their caps is the help of their state governments. For example, last year three states announced major investments in charging infrastructure for EVs. They are California, New York, and New Jersey.

The states are investing roughly $1.3 billion over the next few years to make EVs more appealing. It’s all about getting drivers out of their gas-guzzling rides.

Jonas’ note comes on the heels of Morgan Stanley reiterating its “equal to weight” rating on Tesla. Its price target for Tesla’s stock is between $283 and $291.

The positive news comes ahead of Tesla’s March deadline to pay off $920 million of convertible bonds that it issued in 2014.

Last modified: March 4, 2021 2:30 PM

Tedra DeSue: If you can buy it, trade it, invest in it, or sell it, I write about it. For more than 20 years, I've covered all things finance. Based in Atlanta, Ga., I threw myself into covering the crypto space with a keen understanding that it would be an industry disruptor. I'm in constant search for the real Satoshi Nakamoto!